SEC delays tokenisation exemption again as White House and SIFMA push back

The U.S. Securities and Exchange Commission has postponed its planned “innovation exemption” for tokenised securities trading for at least a second time, after resistance emerged from both the White House and Wall Street trade bodies. The commission had been expected to release at least portions of the exemption alongside its now-cancelled open meeting on Friday, which was also meant to cover a separate “Reg Crypto” rulemaking initiative. That meeting was cancelled late Thursday, and industry insiders have been told the exemption effort may need to await the outcome of the Digital Asset Market Clarity Act currently moving through Congress.

The White House’s concern is procedural and legislative: releasing the exemption now could, in the words of one person familiar with the discussions, “kick a hornet’s nest” while Congress is still negotiating the Clarity Act, potentially derailing broader crypto legislation. Separately, SEC staff have grown more attentive to whether the agency has completed sufficient economic analysis and followed the procedural steps legally required to justify issuing such broad relief at all.

SIFMA, the trade group representing major broker-dealers and investment banks, has emerged as another significant obstacle. The group contends that sweeping market-structure changes of this kind should move through formal notice-and-comment rulemaking rather than exemptions or no-action relief. Its specific concern is how blockchain-based trading venues, including those using automated market makers, would interact with best-execution obligations under Regulation NMS, which currently ties brokers to the best available protected quotation across exchanges. The SEC had proposed in June eliminating Rule 611 of Regulation NMS, the Order Protection Rule, widely seen as a key obstacle to tokenised trading, but SIFMA’s broader procedural objection appears to extend beyond any single rule change.

The delay lands at an awkward moment: exchanges and clearinghouses are already testing blockchain-based trading in parallel, and analysts project the tokenised asset market could reach the trillions of dollars by the end of the decade. The gap between market momentum and regulatory clarity is widening rather than closing, and the likelier read is that any formal exemption framework is now contingent on how the Clarity Act resolves rather than on the SEC’s own timetable.